IDC Lowers Chip Sales Forecast as Consumer PC Demand Slows

IDC analysts say that processor shipments will grow 9.3 percent this year, a drop from the 10.3 percent predicted earlier, due in part to lower consumer demand for PCs.

IDC analysts are reducing their projections for processor growth this year, due in large part to slowing consumer demand for PCs fueled by problematic economic issues in mature markets like the United States and Europe.

In a report Aug. 2, IDC analysts said they now expect shipments of PC microprocessors -- which include chips for mobile devices, desktop PCs and x86 servers -- to grow 9.3 percent in 2011, down from the 10.3 percent they estimated earlier.

Consumer demand for PCs has been an issue for several quarters. Executives from both Intel and Advanced Micro Devices have said over the past few months that while corporations have continued a strong PC refresh cycle, consumer purchases have slowed. They have pointed to Microsoft s release of Windows 7 last year, saying the new operating system coupled with an improving economic environment after the recession helped drive strong consumer purchases in 2010.

Now that many of those consumers have relatively new PCs, demand has waned. In addition, there is ongoing debate whether the rise of tablets, led by Apple's wildly popular iPad line, has cannibalized some PC sales, putting a further dent into the market.

IDC analysts in June argued that the trend among consumers is for more devices, including smartphones and tablets, which may be impacting PC sales. They reduced their PC shipment growth forecasts for the year, from 7.1 percent to 4.2 percent, based largely on consumer demand.

"Consumers are recognizing the value of owning and using multiple intelligent devices, and because they already own PCs, they're now adding smartphones, media tablets and e-readers to their device collections," Bob O'Donnell, vice president of clients and displays at IDC, said in a statement in June. "And this has shifted the technology share of wallet onto other connected devices."